PRESENTER: Presenter
Jeff Jewell, Economic and Community Development Director
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SUBJECT: Title
Presentation and discussion on a proposed project expenditure to support the Gruene 16 project.
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DEPARTMENT: Economic and Community Development
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COUNCIL DISTRICTS IMPACTED: 4
BACKGROUND INFORMATION:
At the New Braunfels Economic Development Corporation (NBEDC) workshop on June 15th, 2023, the Board was introduced to a process to undertake predevelopment and feasibility work for the eventual development of the Gruene 16, Block 1, Lots 1-3 property. This property was purchased by the NBEDC in 2016 for HD Supply’s planned expansion, which did not occur. The described process works with key stakeholders to conceptualize the project and objectives, develop a basic “vision” for the project, determine the market demand for the project as envisioned, and develop high level building and infrastructure budget estimates to determine the overall feasibility of the development concept(s) that receive the most support. This is intended to be the first steps in the feasibility and development concepts stage, with a second stage proposed to ultimately solicit a developer and negotiate a development agreement to bring the project to fruition. The NBEDC Board directed staff to move forward with the proposal.
The NBEDC, at its regular meeting on August 17, 2023, approved an expenditure to Economic & Planning Systems, Inc. (EPS), to begin the planning for a possible public/private partnership addressing the Gruene 16 property.
EPS facilitated a workshop with the NBEDC Board on November 14, 2023 and addressed objectives for the site, identified key questions for additional research, and established parameters for the next steps of the potential public/private partnership. EPS facilitated another workshop with the NBEDC Board on May 16, 2024 and reviewed the completed feasibility study, Council and NBEDC goals, economic, demographic, and market trends, discussed broker insights, highlighted opportunistic land uses, and reviewed themes and concepts discovered during the study.
The NBEDC approved Phase 2 funding at its July 18, 2024 meeting. Phase 2 included urban planning, completing financial feasibility studies, and drafting a Request for Proposals/Request for Qualifications for future development.
During the early stages of Phase 2, a real estate professional contacted staff regarding the availability of five parcels on Grueue Road - adjacent to the Gruene 16 property. Early in the feasibility, EPS advised the addition of these parcels to expand possibilities and impact of the project. These parcels were then added to the urban planning and test fitting analysis. The inclusion of the parcels provides a greater footprint and yielded four different development scenarios:
- Local: Including office space, retail space, townhomes, live/work units, with a plaza, and open space
- Visitation: Including conference space, hotel, retail, open space, and a plaza
- Creative: Including office, hotels, retail, movie theater, film studio, open space, and a plaza
- Visitation + Creative: Including hotels, retail, open space, conference space, film studio, a plaza, and open space
ISSUE:
The intent is to enter a purchase contract for the property at a cost of $50,000 with a nine-month feasibility period. The purchase price, if approved at a future date, is $4,600,000 and is within 5.2% of the appraised value. The addition of the properties to the project requires the EDC to provide $50,000 in earnest money for a nine-month feasibility period with the following schedule of earnest money refunds if the contract is terminated within the following schedule:
• First three months, $45,000 returned to EDC;
• 4th and 6th month, $40,000 returned to EDC;
• 7th and 9th month $35,000 returned to EDC;
An additional 3-month feasibility extension can be exercised with an additional $50,000 Earnest Money deposit. If the EDC exercises the extension option and terminates during the extension both $50,000 Earnest Money deposits are returned to the EDC less $25,000. Closing is on or before 60 days after the Feasibility Period expires. The purchase contract is transferrable.
STRATEGIC PLAN REFERENCE:
☒Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☐Community Well-Being ☐N/A
FISCAL IMPACT:
N/A
Recommendation
RECOMMENDATION:
Board direction to move forward with next steps.